During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 40,000 mini refrigerators,...

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During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 40,000 mini refrigerators, of which 36,000 were sold. Operating data for the month are summarized as follows: 1 Sales 2 Manufacturing costs: Direct materials Direct labor 5 Variable manufacturing cost Fixed manufacturing cost 7 Selling and administrative expenses: Variable 3 4 6 8 Fixed $2,800,000.00 1,200,000.00 800,000.00 440,000.00 $540,000.00 216,000.00 $8,280,000.00 5,240,000.00 756,000.00 Required: 1. Prepare an income statement based on the absorption costing concept.* 2. Prepare an income statement based on the variable costing concept.* 3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2). During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 40,000 mini refrigerators, of which 36,000 were sold. Operating data for the month are summarized as follows: 1 Sales 2 Manufacturing costs: Direct materials Direct labor 5 Variable manufacturing cost Fixed manufacturing cost 7 Selling and administrative expenses: Variable 3 4 6 8 Fixed $2,800,000.00 1,200,000.00 800,000.00 440,000.00 $540,000.00 216,000.00 $8,280,000.00 5,240,000.00 756,000.00 Required: 1. Prepare an income statement based on the absorption costing concept.* 2. Prepare an income statement based on the variable costing concept.* 3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2).

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To prepare the income statements based on the absorption costing and variable costing concepts we need to calculate the cost of goods sold COGS and allocate the manufacturing costs to the units produc... View the full answer